Sanderson and Alderson Predict That

question 45

Multiple Choice

Sanderson and Alderson predict that:

• A) the "three Chinas" will eventually unify into a Chinese superstate that will become the world's major economic power within 50 years
• B) China's capitalist development will eventually be reversed by the actions of the Communist party
• C) China will break apart into about ten sovereign nation-states within the next 50 years

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Definitions:

Capital

Long-term assets or the money used to support long-term assets and projects. Long-term debt and equity on the balance sheet.

Profitability Index

A capital budgeting tool that measures the relationship between the present value of cash inflows and the initial investment, indicating the relative profitability of a project.

Cost of Capital

The rate of return a company must earn on its projects to maintain its market value and attract funding, often consisting of debt and equity costs.

Cash Flows

The aggregate sum of funds moving into and out of a company, particularly influencing its liquidity.